Free Look Cancellation

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  • February 18, 2019 at 4:37 am #23249
    Rishabh Surana
    Moderator

      Each Insurer provides a period (generally 15 days) within which the customer can get back to him with queries regarding his Life Insurance Policy called Free look Period. And if his queries are not answered satisfactorily or he has been mis sold a Life Insurance Policy or he does not agree with the Terms and conditions as mentioned in the Policy Documents, then he can cancel the policy without any charges or fine.

       No charges would be charged other than mortality charge for those 15 days and medical charges and stamp duty charges are deducted.

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      February 18, 2019 at 4:03 pm #24483
      bhavesh
      Participant

        Sir logic for deduction for medical charges I didn’t get it and mortality charges because he is not having any policy so why he would pay any charges

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        February 18, 2019 at 4:35 pm #24484
        rishabh0307
        Participant

          Because his life was cover for 15 day

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          February 18, 2019 at 4:50 pm #24485
          bhavesh
          Participant

            Okay it means if the life’s dies within 15days then claim would have to be paid by the insurer

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            February 19, 2019 at 6:04 am #24486
            Rishabh Surana
            Moderator

              Bhavesh wrote:

              Okay it means if the life’s dies within 15days then claim would have to be paid by the insurer

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              The insured has already taken the policy and he haven’t applied for free look cancellation ,so if he would have died the insurance company would be liable to pay the sum assured .Since he was under the insurance cover for those many days uptil which free look cancellation haven’t been applied for ; so that proportionate amount is been deducted .

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              February 19, 2019 at 7:54 am #24487
              actuarymansi
              Participant

                Further to add.. in case of unit linked plans.. the gain or loss because of change in NAV is also transferred to the policyholder..

                Practically there are FLCs which are happening during first 2-3 months as well in India

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                February 20, 2019 at 4:40 pm #24488
                Mayank Goyal
                Keymaster

                  actuarymansi wrote:

                  Further to add.. in case of unit linked plans.. the gain or loss because of change in NAV is also transferred to the policyholder..

                  Practically there are FLCs which are happening during first 2-3 months as well in India

                  Sent from my ONEPLUS A6000 using Actuarial Info mobile app

                  The loss would be deducted from the premium paid as he will be getting the premium back. Do they also charge these mortality charges, medical and stamp duty charges?

                  February 20, 2019 at 4:45 pm #24489
                  actuarymansi
                  Participant

                    It might not be loss always.. it can be gain too depending on NAV movement… Yes mortality is usually charged proportionately basis number of days for which cover is provided and other charges as mentioned will be applied.. some companies waive off mortality charges so as to avoid unnecessary hassles of calculation and for customer understanding ease.

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                    February 20, 2019 at 4:59 pm #24490
                    Mayank Goyal
                    Keymaster

                      actuarymansi wrote:

                      It might not be loss always.. it can be gain too depending on NAV movement… Yes mortality is usually charged proportionately basis number of days for which cover is provided and other charges as mentioned will be applied.. some companies waive off mortality charges so as to avoid unnecessary hassles of calculation and for customer understanding ease.

                      Sent from my ONEPLUS A6000 using Actuarial Info mobile app

                      Ohh, I get it. Thank you!

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                      February 20, 2019 at 5:55 pm #24491
                      shivang99
                      Participant

                        What exactly is mortality charge?

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                      Actuary Forums › Forums › Learnings › Daily Dose › Free Look Cancellation